IT Stocks Bleed in Trade; Wipro Bucks the Trend on Morgan Stanley Upgrade

All information technology stocks, barring Wipro, were trading in red on the National Stock Exchange on June 19, today. The sector saw broad-based selling pressure after brokerage firm CLSA flagged continued weakness in discretionary spending due to a challenging macroeconomic backdrop.

At 10:33 am on June 19, LTIMindtree, Oracl Financial Services and Tech Mahindra were among the worst performers and were trading 2.6-3% lower on the bourses. The overall, Nifty IT index was down over 1% from its previous close.

CLSA noted that while demand remains strong in the BFSI (banking, financial services, and insurance) vertical, other sectors like retail and automobiles are witnessing subdued IT spending. A ‘V’ shape recovery is expected in the coming quarters, the brokerage firm said.

In a separate development, Morgan Stanley downgraded Tech Mahindra to ‘underweight’ from ‘equal-weight’ while marginally increasing its target price to ₹1,575 from ₹1,550. The revised target implies a potential downside of 8% from the stock’s last closing price, likely contributing to the fall in stock price today.

Wipro rose nearly 1% on the NSE today after the brokerage firm upgraded it to 'equal-weight' from 'underweight' and raised its target price to ₹265 from ₹216 per share. Wipro is the only stock in the Nifty IT index to trade in green today.

Valuation multiples are not compelling enough despite remaining below five-year averages, given the muted revenue and earnings growth, CNBC-TV18 cited Morgan Stanley’s report. However, it further added that growth outlook is slightly better than feared. Despite these modest improvements, the brokerage firm remains less constructive on the overall IT sector.

Apart from Wipro, Morgan Stanley prefers Tata Consultancy Services (overweight) and Infosys (equal-weight) among large-cap IT stocks, over HCL Technologies (equal-weight), LTIMindtree (equal-weight), and Tech Mahindra. On the other hand, Infosys and Tech Mahindra are the top picks for CLSA.

Morgan Stanley has said that in the mid-cap IT stocks it has an 'overweight' stance on Coforge and 'equal-weight' on Mphasis. The brokerage firm has an 'equal-weight' rating on L&T Technology Services and an 'underweight' rating on Cyient and Tata Elxsi.

The Nifty IT index has gained 11% in the last one year, but has lost 11% in 2025 so far. The sectoral index has gained just near 2% in last one month.